PayPal Catches Heat for Freezing Charity Account

PayPal today issued a public apology after it came to light that a scrooge in the payment service's accounting department froze an account belonging to an organization collecting donations in order to hand out toys to underprivileged kids. The site's 'mistake' was using the "Donate" button, which a PayPal rep informed them was only for nonprofit organizations.

Regretsy.com posted a transcript on the conversation between it and PayPal, and it underscores the frustration of dealing with customer service, as well as the opposite risk of pissing off the wrong person. Regretsy took its beef online and posted all the gory details on its blog, including this tidbit:

PayPal: Only a nonprofit can use the Donate button.Regretsy: That's false. It says right in the PDF of instructions for the Donate button that it can be used for "worthy causes."PayPal: I haven't seen that PDF. And what you're doing is not a worthy cause, it's charity.

That's right, a PayPal representative made the distinction between a "worthy cause" and "charity," even one that's attempting to hand out toys during the holiday season.

Regretsy, being the snarky blog that it is, had a little fun with PayPal in the process, but there was nothing funny about the underlying issue of PayPal's callous attitude. The predictable result in this day and age of the Internet was an online backlash that ultimately forced PayPal's hand.

"Though we can’t comment specifically on the account due to our privacy policy, we can confirm that the funds have been released and we are working directly with the account holder on this matter," PayPal said in a statement. "Just like anyone else, we believe strongly in helping those in need, especially around the holiday season. We are working with Regretsy to make a donation to help their cause, and we’re truly sorry this occurred."